The Queen has made an extraordinary profit of £35.3m out of taxpayers' cash given to finance her lifestyle over the last decade. The figure was revealed this year when Tony Blair and Gordon Brown released the financial accounts of the civil list - the £7.9m a year voted by parliament to the royal family to cover their public duties.

The huge surplus came to light after it was revealed in parliament this year that a deal was struck a decade ago with former prime ministers Lady Thatcher and John Major. This allowed that the Queen should receive a fixed sum for her official duties and those undertaken by the Queen Mother and the Duke of Edinburgh. The figure had a built in allowance for 7.5% inflation - which never materialised. Over the decade it averaged 3.2 %.

The reason why the figure was hidden for so long is because spending on the monarchy is kept secret under a deal signed more than two centuries ago. The civil list dates from an agreement between George III and parliament in 1760. The monarch agreed to hand over the revenue from the crown estate - which owns everything from large landholdings in Somerset to the freeholds of shops in London's Regent Street - in return for an allowance voted by parliament. Parliament's exchequer and audit department was kept away from examining the accounts.

The deal was rewritten in 1952 under Winston Churchill's government. In 1952 a new Civil List Act agreed to an annual review to cover the Queen's royal expenses - regular allowances for all the royals - and it authorised other government departments to fund royal activities. At present six ministries, two executive agencies and one nationalised industry (the Royal Mail) all fund royal activities, on top of the money from the civil list- taking this year's expenditure to over £37m. In 1972, after a period of raging inflation, Edward Heath's government passed a new Civil List Act which gave the Queen a guaranteed regular income for a decade. It was decided that the Queen should not ask parliament to vote her cash every year because "an annual review would not be commensurate with the honour and dignity of the monarchy".

The result is that civil list is now the least scrutinised account in the whole country. The figures on the money the Queen spends can only be examined every 10 years. MPs are barred from asking questions about spending on the civil list - they are automatically stopped by the House of Commons table office from even putting them down. Parliament's financial watch-dog, Sir John Bourn, the comptroller and auditor general, is still not allowed to audit the civil list. He has recently been allowed to scrutinise the accounts of the royal household but the civil list remains "out of bounds". They are the sole responsibility of Michael Peat, the keeper of the privy purse. They can only be seen and checked in private once a year by the permanent secretary at the treasury, Sir Andrew Turnbull. The civil list is forecast to spend £4,701,971 this year on the salaries of courtiers and staff to serve the Queen. It shows the Queen plans to spend £423,326 on garden parties; £66,749 on wine and spirits for receptions; £118,000 on royal carriages; £142,000 on stationary and £230,872 on private travel. She will also spend £72,000 on lawyers and other professional services. No such detailed figures on the royal accounts will now be issued until 2010.

In addition the Queen receives over £1m a year for annual salaries for the Queen Mother, who receives £643,000, and the Duke of Edinburgh, who receives £359,000. All the other allowances from the Duke of York to Princess Margaret are now funded from her private sources. Prince Charles receives a private income from the Duchy of Cornwall.

The civil list only tells part of the story. By the far the larger sum, amounting to nearly £30m this year, comes from money voted from other ministries for the upkeep of the occupied royal palaces - Buckingham Palace, St James' Palace, Kensington Palace, Holyroodhouse, Clarence House and Windsor Castle. The cash also covers royal travel, administering the honours system, stands and flags for state visits, computer support and over £1.2m on posting letters. The more these accounts - which can be examined by Sir John Bourn and the Commons public accounts committee - are scrutinised the larger the fall in these bills. The total bill for funding royals has dropped from £65.5m in 1991 to a forecast £37.2m this year.

Alan Williams, Labour MP for Swansea West and the most senior Labour member on the Commons public accounts committee, believes this is not a coincidence. He is probably the most assiduous watcher of royal spending in the present Commons. Over the last six years he has queried how much use has been made of the royal yacht, the royal train and the Queen's flight - disclosing that these remained idle for most of the year. He also uncovered how many of the royal courtiers were living in subsidised expensive flats in the royal palaces - at rents lower than those charged by Westminster City Council for its tenants.

Since his questioning began the palace has made enormous strides in saving cash. The royal yacht, which was costing the taxpayer up to £12m a year to maintain, has gone. The royal train has been privatised and its cost has dropped from £2.6m a year to a leasing deal costing £237,000 a year. The Queen's flight bill is down from over £16m a year to around £11m. The courtiers, from royal librarian, to the private secretaries to Princess Margaret and the Princess royal, have lost their cheap flats. Other royal staff such as Michael Peat, the keeper of the privy purse, are now paying economic rents - though some have been rewarded with a large salary hike to compensate.

The royal staff benefit from a generous non-contributory pension scheme which has just gone up from 18.8% to 20% of salaries. The payment of pensions has now been subsumed in the civil list - which will end scrutiny for the next 10 years.

And if inflation remains around 2.5%, a recent parliamentary answer to Alan Williams from Stephen Timms, financial secretary to the Treasury, shows the Queen will still be quids in from the civil list by 2010. It shows she will still have an £8m surplus.

Estates of the realm

 Most of the Queen's property, including the royal palaces in London and Windsor, her jewellery, the crown jewels, the royal collection of paintings and even the royal stamp collection are held by the queen as sovereign. She cannot sell them and they must be handed on to her successor.

 The queen does not own the eight state limousines (five Rolls-Royces, three Daimlers) or the royal people carriers (Vauxhall Sintras). But she has a driving licence and owns a Daimler Jaguar saloon and a Vauxhall estate. The Duke of Edinburgh has a Range Rover and a Metrocab for London.

 The royal train is owned and managed by Railtrack.

 Balmoral Castle and the Sandringham estate are owned by the Queen. Both were bought by the royal family in the 1850s and 1860s. Balmoral, a Victorian gothic castle has an estate of 50,000 acres, employing 50 people full-time and 100 part-time. Sandringham, near King's Lynn in Norfolk, is a Victorian mansion with grounds of 60 acres and an estate of nearly 20,000 acres, including tenanted farms, forestry, two studs, a fruit farm and country park, employing 140 full time staff.

 West Ilsley racing stables in Berkshire, and Sunninghill Park near Windsor, where the Duke of York lives, are both owned by the Queen.

 She receives income from the Duchy of Lancaster (estates held in trust for the sovereign since 1399) amounting to £5.7 million before tax in 1997-98.

 She has an investment portfolio, the details of which have not been disclosed but which is taxable. In 1993 the lord chamberlain said rumours that it was worth more than £100 million were "grossly overstated" but if her financial advisers have been doing their job properly it may well might be now.

Other members of the household: lord great chamberlain, earl marshal, lord steward, master of the horse (unpaid, ceremonial posts) ladies-in-waiting, including mistress of the robes, two ladies of the bedchamber (titled), five women of the bedchamber (untitled) and an equerry. The ladies-in-waiting, appointed personally by the queen, accompany her on public engagements on a rota basis (they're the ones carrying the flowers and cards handed over by members of the crowd during walkabouts). They also write the replies to letters sent to the queen. They receive no pay but expenses.

 The Royal Equerry (an officer of the services, seconded for three years, currently Sqn Ldr S Brailsford) also accompanies the queen and is responsible for supervising the planning and carrying out of engagements.

 There are also ecclesiastical households - current clerk of the closet is the Bishop of Derby - domestic chaplains and the dean of the chapel royal, a medical household, including a serjeant surgeon, coroner and apothecaries and a separate household in Scotland. Other posts include lord high almoner (the Bishop of Wakefield), master of the queen's music (Malcolm Williamson), poet laureate (Andrew Motion), bargemaster, a swan warden and a swan marker .

 The Gold Sticks, representing the armed forces, are the Princess Royal and General Sir Charles Guthrie, aides-de-camp from each of the services, a gentleman usher to the sword of state (Admiral Sir Michael Layard).

 Many of these posts are replicated north of the border, though with additional offices such as the hereditary banner bearer (the Earl of Dundee), hereditary bearer of the national flag of Scotland (Earl of Lauderdale), historiographer (Prof TC Smout), sculptor in ordinary (Prof Eduardo Paolozzi), a botanist and painter and limner.

This is the nearest there is to a court these days, writes Stephen Bates: six departments and 645 full-time staff, under the authority of the lord chamberlain - currently Lord Luce, former Tory MP, junior foreign office minister (resigned over the Argentinians' Falklands invasion but later reinstated) and former governor of Gibraltar. The lord chamberlain's post is part-time: he chairs meetings of the departments, supervises the running of the household, sits in on appointments and undertakes ceremonial duties. He is the channel of communication between the queen and the house of lords. Formerly a party-political appointment but since 1924 non-partisan. Symbols of office: white staff (ceremonially broken when the sovereign dies) and a key.

The lord chamberlain's office is independent of the lord chamberlain himself and run by the comptroller, Lt-Col Walter Ross. Formerly the office of the official censor, it now advises on protocol, organises state visits, investitures, garden parties, the ceremony of the garter, state opening of parliament, royal weddings and funerals, liaises with the foreign diplomatic corps in London and supervises royal warrants and the commercial use of royal photographs and emblems. It also organises the royal bodyguards, 27 Gentlemen at Arms, 81 yeomen of the guard and 400 members of the royal company of archers, the queen's bodyguard in Scotland

Headed by Sir Robin Janvrin, ex-diplomat and Royal press officer, it advises the queen on constitutional, governmental and political matters, liaises with the 16 governments of whose countries the queen is head of state, organises royal visits and trips, deals with correspondence and consults with the Church of England, armed services and organisations for whom the queen is patron. It also sends out messages of congratulation to centenarians

Vice-Admiral Tom Blackburn is responsible for domestic arrangements, catering and entertaining, the royal kitchens and cleaners, footmen and pages and the royal post office. He heads a staff of 285

Responsible for coordinating transport and ceremonial horses, the crown equerry's department is run by Lt-Col Seymour Gilbart-Denham, ex-Life Guards

Presided over by Sir Michael Peat (from accountants KMPG, formerly Peat Marwick), it supervises the royal finances, including the upkeep of the palaces. Sir Michael actually carries a large purse, embroidered with the royal coat of arms, on ceremonial occasions